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Dividend Adjustment Model with Annual Dividend Calculations

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(Dividend adjustment model) Last year's dividend for Woolridge Outfitters was $1.00. This year's earnings per share are $4.00, and Woolridge's target payout ratio is 40%. Using the dividend adjustment model, Equation (18.1), what would be this year's dividend with each of the following adjustment factors?
a. 70%
b. 0%
c. 100%

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Solution Summary

The solution computes dividend with different adjustment factors.

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Dividend Adjustment Model Formula

DPS1 = DPS0 * ADJ*(PR*EPS1 - ...

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